TMI Blog2015 (6) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... S.M. Bandi For the Respondent: Shri Asghar Zain O R D E R PER N.K. BILLAIYA, AM: These are cross appeals by the Revenue and the assessee against the very same order of the Ld. CIT(A)-1, Thane dt. 28.9.2012 pertaining to assessment year 2009-10. As common issues are involved, both these appeals were heard together and are disposed of by this common order for the sake of convenience and brevity. 2. Facts of the case are that the assessee is a dealer in steel iron. The return for the year under consideration was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. While scrutinizing the accounts of the assessee, the Assessing Officer noticed that the assessee has issued new 92700 shares of face value of ₹ 100/- at a premium of ₹ 1000/-. Total shares issued amounted to ₹ 10,19,70,000/-. Out of the total share capital issued ₹ 9,60,30,000/- i.e.( 87,300 shares X ₹ 1100) is to various companies and remaining ₹ 59,40,000/- i.e. (5400 X 1100) is to family members of the Directors. The details of the share capital subscribed by the company are as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n received from the Dy. Director of Income Tax (Inv.) Unit- 1(4), Mumbai, the AO came to know that search action u/s. 132 of the I.T. Act was carried out in the case of M/s. Mahasagar Securities Pvt. Ltd. and its group concerns. The companies mentioned hereinabove are group concerns of this group which are floated by Shri Mukesh Choksi. The AO further found that M/s. Mahasagar Securities Pvt. Ltd., and its group concerns were engaged in fraudulent billing activities and in the business of providing bogus speculation profit/loss, short term/long term capital gain/loss, commodities profit/loss on commodity trading (through MCX) and bogus share capital introduction. 2.3. The AO further observed that during the course of search, the sworn statement of Shri Mukesh Choksi was recorded in the office of DDIT who had confirmed the clandestine activity referred to hereinabove. Statement of Shri Mukesh Choksi was once again recorded during the course of the assessment proceedings u/s. 131 of the Act wherein Shri Mukesh Choksi once again admitted the modus operandi. The AO was convinced that share subscription made by Shri Mukesh Choksi and his concerns are bogus and documents are fabric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been brought on record before us. Even if we consider the statement of Shri Mukesh Choksi recorded u/s. 132(4) of the Act and also subsequently u/s. 131 of the Act, we do not find any reference to the assessee company, nowhere Shri Mukesh Choksi has said that he has arranged share capital for the assessee company. Merely because Shri Mukesh Choksi is indulged in clandestine activities would not make the transactions with the assessee company non genuine. The transactions have been done through account payee cheque and it is not a case of the Revenue authorities that prior to issuing the cheques the applicants have deposited cash in their respective bank account. The Hon ble Supreme Court in the case of Lovely Export Pvt. Ltd. 216 CTR 195 has held that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of the assessee company. 6.1. In respect of other two companies viz., (1)M/s. Premier Soya Ltd.,(2) M/s. Indo Con Core Pvt. Ltd., the AO at page-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o these companies. ii) The Director of the Company did not attend the proceedings. All these companies were represented by their respective Chartered Accountants who have furnished the necessary details. iii) In respect of one company viz., WAH Foods Pvt. Ltd., the address given by the assessee was found to be not correct. 8.1. The AO finally concluded by holding that the assessee has failed to establish the identity, genuineness of the transaction and credit worthiness. 8.2. When the matter was agitated before the Ld. CIT(A), the Ld. CIT(A) on the same set of reasoning as given by the AO confirmed the additions. The Ld. CIT(A) agreed with the AO that in place of Directors, Chartered Accountant of these companies have appeared who were not authorized to make any statement on behalf of these companies. 9. Before us, the Ld. Counsel for the assessee reiterated what has been submitted before the lower authorities. The ld. Counsel drew our attention to the relevant documents brought on record before us in the form of a paper book. Referring to order V Rule 1 of the Code of Civil procedure, the ld. Counsel pointed out that it has been provided that a defendant to whom a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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